Ch 4

Measuring Productivity in the

Construction Industry

Why
Measure Productivity?

What is Labour Productivity?

Productivity = Output / Input

(Planned hours / Worked hours)

Or
(Planned unit /hr / Actual unit /hr)

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EstimatedTender

Labour 40%
•Largest cost
Materials 40% component
General Conditions • Most volatile
& Indirect Costs 10%
• Most critical
Overhead 5% to control
Profit 5%
Total 100%

Actual Values

Labour 40% 45%

Materials 40%
General Conditions
A 12.5%
& Indirect Costs 10% overrun in the
Overhead 5% labour
component
Profit 5%
Total 100% 105%

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Quantifying Productivity
Losses

Common Causes of Labour

Overruns
Internal:
• Poor planning & management of work
• Rework & errors
• Bad estimate
• Lack of training
• Morale problems
• Staff turnover
• Material & equipment availability

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Common Causes of Labour

Overruns
External:

• Overtime
• Changes
• Crowding
• Trade Stacking
• Weather
• Site Access

Why Measure Productivity?

• You can’t correct a problem if you don’t know it exists
• By the time the job is over, you’ve lost the money
• You will have current information to manage and control
your project
• You should correct losses arising from internal problems
• You may be able to recover losses arising from external
causes

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Sample Charts of Labor

Production Factors

Effect of Crowding on Labor Productivity

20%
% Labour Loss to Inefficiency

15%

10%

5%

0%
0% 5% 10% 15% 20% 25% 30% 35%
% Crowding

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Effect of Overtime on Labor Productivity

Productivity Rate - 2hr over time load

100% 100%
95%
93%
91%
89%
87%
85%
83%
80% 81%
Efficiency

80% 79% 79% 78%78%

60%

40%
0 2 4 6 8 10 12 14

Days

Effect of Change Orders on Productivity

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Factors Affecting Productivity

Factors Minor Average Severe

1. Stacking of Trades 10% 20% 30%

2. Morale and Attitude 5% 15% 30%
3. Reassignment of Manpower 5% 10% 15%
4. Crew Size Inefficiency 10% 20% 30%
5. Concurrent Operations 5% 15% 25%
6. Dilution of Supervision 10% 15% 25%
7. Learning Curve 5% 15% 30%
8. Errors and Omissions 1% 3% 6%

Factors Affecting Productivity

Factors Minor Average Severe
9. Beneficial Occupancy 15% 25% 40%
10. Joint Occupancy 5% 12% 20%
11. Site Access 5% 12% 30%
12. Logistics 10% 25% 50%
13. Fatigue 8% 10% 12%
14. Ripple 10% 15% 20%
15. Overtime 10% 15% 20%
16 Season and Weather Change 10% 20% 30%

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Difference Between

Labour Productivity
and
Labour Efficiency

Labour Productivity

IS A MEASURE OF THE ACTUAL

LABOR PRODUCTION RATE ONLY

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Labour Efficiency

IS A MEASURE OF OTHER FACTORS ,

THAT AFFECT THE NET PRODUCTION
OF A WORKER
Represented in %

Labour %Efficiency

Is a Measure of all of the

Worker’s:

1-Productivity
2-Availability
3-Reliability
4-Comprehensibility

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Labour Efficiency Table

Alloc. Dur Unit Act. Dur % Eff

Measures how well the

Productivity
production activity is performed

How much the worker is present

Availability
and available to do his work

How much time he is waste- free

Reliability
in his working period

How much time required to

Comprehensibility
respond for a given new task

Net Efficiency

Labour Efficiency Example

Alloc. Dur Unit Act. Dur % Eff
Measures how well the
Productivity 1 hr 1.1 91%
production activity is performed

How much the worker is present

Availability 14 day 13 93%
and available to do his work

How much time he is waste- free

Reliability 8 hr 7 88%
in his working period

How much time required to

Comprehensibility 1 hr 1.15 87%
respond for a given new task

Net Efficiency 64.2%

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Labour Productivity

1 2 3

Defining  Productivity  Improving 

Productivity Factors Productivity

Improving Productivity

In today's tough business environment there are

fewer options for making a satisfactory profit.
One of the remaining options is to improve labor
productivity.

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Improving Productivity

The first way to increase productivity should be to uplift the

skills of supervisors and managers so that they can
enhance the performance of their teams. This is the most
cost-effective way of increasing workplace productivity.

Improving Productivity
Few suggestions for managers to improve productivity:

1. Set a fair and reasonable level of expectations regarding the

performance of the employees.
2. Ensure that every member of staff has a clear understanding of how
their job performance is measured.
3. Set up a system of communication so the employees can be given
information about progress on their jobs.
4. At every opportunity use positive attitude with each employee.
5. Celebrate successes and milestones.
6. Catch people doing it right.
7. Coach people doing it wrong.

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Improving Productivity
If people don't know specifically what is expected of them in
measurable terms, it is unlikely that they will perform to the
level required.

This can be described as on-the-job coaching where the

manager coaches the person doing the job so that they
have the tools, the knowledge and skill, to successfully do
the job.

Improving Productivity

The Secret Strategy of Getting Maximum Productivity

This secret strategy is far more effective than any system,

tool or method of motivation for individual productivity
improvement.

Just think of it this way; Nothing in this world can raise your
productivity more than when
you really enjoy every aspect of your work.

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